How secure is a university financially.

[justasking111]

I have to admit to being worried about universities. With media reports of dropping numbers, large debts. It seems to be another concern when choosing which uni. to attend. One popped up this morning, I am sure there must be others.

www.thebangoraye.com/report-suggests-new-buildings-have-caused-multi-million-pound-debt-at-bangor-university/?fbclid=IwAR3SBQiKVRgS_heGTq0m_7vnx4UsmR9CV9wxH9_OY3KTYEcqbRTXr2OcDR4

I don't know the answer but am also interested in this. If you sign up for email updates and tick the box for potential student rather than parent, you get an interesting feel for the lengths an institution will go to to attract applicants. And at open days I felt that some places seemed desperate to give a good impression, others seemed confident enough to say "we might not be right for you & you might not be right for us". I think all universities need to attract more students to pay the bills, but the hard sell of some rung alarm bells for me. Of course this is just basing it on my impressions and opinions, and I would really like to know if there are ways of finding out whether a university if financially sound before a dc commits to giving them nearly £30k in tuition fees.

Well the loans company is giving them the money! If DC is a lower earner afterwards, they won’t be paying much off! So whose money is the university getting when only around 50% of grads are likely to pay off the loan?

However, the most vulnerable universities are the ones who take students with lower than D grades. The Auger report thinks these lower grade students shouldn’t be allowed to have loans at all because research shows they don’t get anywhere near paying them off so the whole process is bad value for the state. This is approximately 120,000 students and they congregate in several lower ranking universities. From memory: London Met, Bolton, Beds and some others. Therefore I would avoid these! Anything in the top half or specialist should be ok.

One wonders why lower achieving students don’t do work related non degree subjects?

Bubbles it is how the unis spend the money. Bangor I know has rebuilt a huge theatre, Pontio, which is losing money hand over fist. Plus problems with two halls of residence they have built. So a uni. may receive the money it is how they use it that is the problem perhaps.

Yes but all universities have been spending! The very ordinary one near me has all sorts of new buildings! Show me one that doesn’t! The worry is where they have spent but may not get the students in the future. I cannot imagine Bangor would need to worry. One has to assume universities have switched on accountants and presumably loans are over a very long period. Why would Bangor be worse than, say Birmingham or Swansea or Bath? You might like to read the article published by The Guardian on 22 September about the university spending spree. You might be hearted to know that Bangor isn’t mentioned.

Heartened !

I think when any company borrow money and become lumbered with repayments it can be a downward spiral. Bangor had a spate of redundancies last year. This obviously did not cure the problem.

inews.co.uk/news/education/university-bankruptcy-reliant-on-loans/

Interesting article, especially some of the comments.

www.theguardian.com/education/2018/nov/23/government-universities-oxford-cambridge-moodys

More here, and comments.

www.bbc.co.uk/news/education-46059457

Well you could choose your university according to Moodys or choose on reputation, course and location like everyone else! Your choice obviously.

This is an often overlooked concern. There's been a purely demographic (i.e. birthrate) related fall off in the number of students starting university in the US and some less selective and lower quality private universities have seen declining enrollment and financial distress. Private universities here get no direct government subsidy, so they can't expect any help that way.

Part of the Wall Street Journal's US university ranking system is an evaluation of their financial stability, which is very reassuring to know.

Universities have become a lot more reliant on the money they make from students in the last 20 years or so. Previously students were very much second to research. Now the student tuition fee income and the money they make from providing accommodation is very significant, especially as they get far less government funding than they did. That's why students have to pay more, because the government subsidy was taken away.

Now that the recent baby boom is working its way through, UK student numbers are bound to fall off a bit and Brexit will have an effect on EU student numbers. We used to attract lots of students from outside the EU, especially through our Commonwealth connections, but that's a much tougher market these days, because the USA, Canada and Australia are all working hard to attract those students and our previous Home Secretary, one T. May, thought it would be a good idea to restrict student visas as an easy way of cutting immigration. Idiocy. She may have cut back on some overstayers who came to dodgy places with no intention of studying, just getting into the country and then working illegally, but she also managed to put off really good students who would have studied at the top universities.

So yes, I'd be a bit worried about the financial stability of some universities. A really good apprenticeship would probably be a much better bet than a non-vocational degree at some universities in the UK.

There have been several stories in the press in the last couple of years suggesting that some universities are in financial difficulties (this one for example inews.co.uk/news/education/university-bankruptcy-reliant-on-loans/), so I don't think it's unreasonable to be worried, particularly if your dcs are looking at less popular or lower ranking institutions.

think it depends on the course too. There have been examples of popular and well-regarded universities closing smaller departments that were not attracting sufficient numbers and were not considered financially viable. If Bangor closes its chemistry department, it's likely that current students will suffer even if they promise otherwise, as they can't force staff to stay to the very end if they're able to get jobs elsewhere. A friend's dc was on the music degree at Lancaster when they decided to close that department a few years ago. They did honour their commitment to existing students, but modules were cut, staff left, and it wasn't the kind of student experience they'd signed up for.

Every single British university I’ve ever visited seems a bit shabby and I would assume short on funds. The state of some of the Cambridge colleges is really quite shocking.

I suppose that a lot of them haveexoendive buildings to maintain (especially science labs etc) but little choice as to what they charge.

Policies which exclude international students aren’t helpful either. We pay in cash upfront at a higher rate. Universities should be able to take as many as they like at the very least where they have spaces in clearing.

@bittermints in my experience all the spaces available to international students are filled. It’s much more difficult to get into an britishnuniversoty as an international student.

Every single British university I’ve ever visited seems a bit shabby and I would assume short on funds. The state of some of the Cambridge colleges is really quite shocking.

You should probably look up the assets of Oxbridge, before assuming they are short on funds.

UK universities traditionally received money for new buildings/renovations/building of labs and facilities in a separate budget to their teaching and research allocations. The budget for infrastructure was indeed never adequate, hence the very poor looking facilities. Now this budget is almost non existent - except for showy investments like the Francis Crick Lab - and universities have to fund maintenance/facilities/building from their own budgets. For many universities this has meant taking out large loans/bonds -- but the fact that they could get bonds at good rates reflects the confidence of the markets in their longterm prospects.

Sadly much of the building work has been focussed on facilities that would attract students/their parents in a competitive market, rather than on facilities that genuinely enhance the educational and research environment e.g. sports facilities and student union facilities instead of labs.

Until a few years ago, there was an unspoken belief that the government would prop up universities in difficult financial situations and wouldn't allow them to fail for the sake of their students.

When Jo Johnson introduced the reforms to make it easier for new providers to enter the market, he made it very clear that the government would no longer do this, that there would be "market exit" and that in the government's eyes this was a good thing because a functioning HE market would drive up standards.

So universities don't have that safety net any more and they have to compete against each other more than ever. That means doing anything they can to attract students and spending money they don't necessarily have in the sometimes vain hope that it will pay off and, inevitably, for some of them, it won't. Most universities will end up making cuts to make their financial position more secure but they will survive, but there's maybe a handful who will be in real trouble.

Personally, as PPs have said, I would be less worried about universities failing and more about courses closing.

in the government's eyes this was a good thing because a functioning HE market would drive up standards.

Come on - this has nothing to do with standards. The UK has many top universities, and the changes to the funding system are damaging them and lowering their standards. It has everything to do with recreating a tiered system in higher education, which benefits those who are already privileged, and with cutting government spending on education.

And just to make clear how it lowers standards: making universities compete for students inevitably increases the budgets for marketing, administrators, student facilities, at the expense of budgets for actual education and research.

Oxford and Cambridge Universities (some colleges in particular) are some of the wealthiest landowners in the UK (along with the Church of England and the Crown).

Some news on universities financial positions

www.theguardian.com/education/2019/mar/21/england-universities-in-deficit-figures-financial-pressure?utm_source=dlvr.it&utm_medium=facebook&fbclid=IwAR3d9pcmZ7bpg5INjmA14tI7h0-XCQGqQdelOrRCPWu5sRHPowfjb2-j5Yw

I think all universities need to attract more students to pay the bills, but the hard sell of some rung alarm bells for me

But you're pointing the finger at the wrong people. As soon as the Coalition government STOPPED using public money directly to pay for tuition at universities, they forced universities to become marketised. We don't want to have to do this sort of selling: it's not what we're about. Quite the opposite, in fact. But the population voted for it - so don't blame the universities ...

The economic idiocy of removing public funding from universities and introducing a tuition fees regime is now being pointed out. The system actually costs the taxpayer more than in 1999.

Every single British university I’ve ever visited seems a bit shabby

That made me laugh. Universities are positively swimming in cash & resources compared to NHS premises & management (I've recently jumped ship).

I wonder what industries do have money. Insurance, oil, big pharma, Tech & Banks, maybe?

Unbelievable and I bet you anything, he will get a full pension despite being such a profligate vice chancellor.

www.dailymail.co.uk/news/article-6995789/Professor-Moneybags-Dominic-Shellard-shows-institutions-brink-bankruptcy.html

Why shouldn't he get a pension? He'll have paid into it.